Also in this playlist...
This transcript is automatically generated
-- giant Chrysler announcing it will be halting its traditional pension plan -- move into 0401 K style plan effective.
At the end of this year.
So what of the unions think of this big shift who better to ask then David -- left.
Mainstay management CEO you'll recognize him.
He's here quite a bit we're happy to say he advises Chrysler employees and retirees on their investments I didn't know you did this David until I got an -- I was -- -- -- I would suspect that the unions hate this idea my right.
Well this actual.
Corporate action affects -- employees it's a salaried pension plan.
That it does seeing this change dominated on -- -- is suspected it might bleed over into their personnel as well.
Oh yeah absolutely I mean that he -- sure they're having -- conversations and that that we could see some of this in the hourly workforce as well it had various companies.
David do you think that this is going to be a national trend because it must be honest you're not just the automakers a lot of companies have had.
Union issues and it goes back to the pensions.
Do think that we're gonna see this kind of continue the switch a few well.
I if you go back about four decades ago nearly half of US companies had a traditional pension plan.
That's now only 14% of US companies at the same time defined contributions have been on the rise and now about half of US company so this is.
A trend we've seen underway and it's actually accelerated.
In recent years.
Well David if you are successful first first with a salaried employees and and then with the union folks if -- indeed it does bleed over into their field.
A lot of cities and states are gonna look to this model because of course the pension funds.
All over the country -- going broke -- it's it's the big secret it's the elephant in the room that could lead to a real.
Downturn in the economy do you think -- applications.
And what you're doing it to this state and local pensions.
There there certainly are applications the difference between the private sector and public sector is that a private company.
You know whether is that the hourly work force -- negotiates with the union or the salaried workforce they just do it.
Make this transition.
In the public sector.
A little bit more difficult.
But we are seeing that where pensions are going to be impacted.
In the city of Detroit potentially with what's going on there.
-- -- I was messed it up because Chrysler is a different animal here because of the Italian ownership issue -- know Ford and General Motors separate story is there a difference in your opinion.
I think that this could be it largely driven by -- the Fiat ownership of this company.
But we -- General Motors.
With a similar action just a year ago in September of last year they also froze.
The pension for a number they're -- employees so again we're seeing this trend.
Across many industries across the nation.
As defined contribution plans are that the -- of choice they're there are more popular with many workers because of their portable your -- dusted.
Whereas with a defined benefit plan a traditional pension plan.
You're thirty years into a career before your 100% busted in from the company side they're costly.
And the regulatory climate it really favors -- 401K type plans David Cutler thank you very much David revolutionary -- it really could affect the nation thanks David good stuff appreciate.
Filter by section